TechFlow news, July 20, JPMorgan strategists stated that AI-related stocks are unlikely to remain under pressure in the long term, expecting strong earnings growth and valuation improvements to re-stimulate demand, particularly for semiconductor companies.
The team led by Mislav Matejka pointed out in the report that semiconductor stocks have become disconnected from improving earnings prospects. The report stated that substantial supply growth will not occur until 2028, therefore it is still "too early" to reflect the semiconductor price turning point in the market now; fundamentals may remain constructive, and the relative strength index of these chip stocks is rapidly approaching the "oversold" zone.
JPMorgan strategists stated that if capital expenditure expectations of hyperscale data center operators remain strong, investors should "re-enter the sector in the summer".
